Observation

This wording does not allow conversion in the argument if the parameter contains template parameters in non-deduced context, but they are otherwise deduced.

Expectation

The wording to allow conversion if all the template parameters in the function parameter are explicitly specified or appear in non-deduced context.

Examples

Example 1

#include <type_traits>

template <typename T>
struct A {
    A();
    A(T);
};

template <typename T>
void bar(A<std::type_identity_t<T>>, A<T>);

void foo() {
    bar(42, A<int>{}); // conversion from int to A<int> in the first argument

In the example the first parameter contains the template parameter T, and T participates in template argument deduction. So the wording doesn't enable implicit conversion in that argument.

Compilers seem to agree that conversion is allowed there: https://godbolt.org/z/aPdK64zeG

Example 2

There is a similar example in the standard too:

Here the conversion happens in the first argument.

Suggestion

I suggest to replace the wording with the following:

Implicit conversions ([conv]) will be performed on a function argument to convert it to the type of the corresponding function parameter if all the template-parameters it contains are explicitly specified or appear in non-deduced context.